Loading...
HomeMy WebLinkAbout80A - JOINT-RESOS LOCAL STREET FINANCING CITY COUNCIL MEETING DATE: CLERK OF COUNCIL USE ONLY: REQUEST FOR COUNCIL ACTION DECEMBER 3, 2007 TITLE: APPROVED o As Recommended o As Amended o Ordinance on 151 Reading o Ordinance on 2nd Reading o Implementing Resolution o Set Public Hearing For RESOLUTIONS APPROVING AGREEMENTS AND FINANCING DOCUMENTS FOR LOCAL STREET FINANCING ~ {2;JlJtZ CITY MANAGER CONTINUED TO FILE NUMBER RECOMMENDED ACTION Adopt a resolution authorizing and directing the preparation and execution of certain financing documents including a certificate purchase agreement, and authorizing the distribution of an Official Statement. Santa Ana Financing Authority Adopt a resolution authorizing and directing the preparation and execution of certain financing documents including a certificate purchase agreement, and authorizing the distribution of an Official Statement. DISCUSSION The Public Works Agency has completed an inventory of all the City's streets that includes their general lifespan condition. Based on staff's assessment, an immediate infusion of funds to rebuild the City's neighborhood streets will enhance the City's ability to address all neighborhood streets and implement a long-term preventive maintenance program. Based on this strategy, it is recommended that over the next five years, $100 million be invested toward rebuilding and repairing City streets. To achieve this initiative, bonds in the amount of $60 million dollars are needed to complete the $100 million investment. Neighborhood street improvements will include grind and overlay, reconstruction, and critical concrete repair of sidewalk, curb and gutter. In order to explore bonding alternatives and capacity, a financing team consisting of a financial advisor (Fieldman, Rolapp & Associates), an underwriter (De La Rosa & Co.), bond counsel (Orrick, Herrington & Sutliffe) I and disclosure counsel (Quint & Thimmig) was retained. Upon evaluation the team is recommending the use of an installment-sale 80A-1 Street Rehabilitation Financing December 3, 2007 Page 2 Certificates of Participation (COP) financing structure that utilizes Gas Tax Revenue as the pledge to repay the certificates. The use of this innovative financing structure has several advantages. First, it utilizes an existing, stable revenue source already designated for the design, construction, maintenance, and operation of public streets and highways. Second, it does not require the pledge of any General Fund monies as collateral for debt paYments. The COP installment sale also allows bonding capacity to exceed the 25% debt service limit allowed through a straight revenue bond structure as authorized under the California Streets and Highways Code. Lastly, the financing structure is exempt from the State's constitutional debt limit thereby preserving the City's ability to capitalize on existing bond capacity should it be necessary in the future. On August 20, 2007 the City Council approved the execution of the Installment Sales Agreement between the City of Santa Ana and the Santa Ana Financing Authority. The agreement permits the purchase of the street improvements from the Santa Ana Financing Authority who then assigns the improvements back to the City for completion. In addition, Council approved a Trust Agreement between the Santa Ana Financing Authority and the Bank of New York. The Trust Agreement reassigns all debt payments to the Bank of New York as the trustee. Finally, the Council authorized the City to initiate the validation process that assigns the use of Gas Tax revenues as a special fund and pledge. On November 16, 2007, a judgment was entered by the Orange County Superior Court validating the use of the gas tax pledge. A 30-day appeal period will expire on December 16, 2007. In conjunction, City staff along with Fieldman, Rolapp and Associates (financial advisor) and De La Rosa & Co (underwriter) prepared a credit presentation for Standard & Poor's consideration. Recently, the City received a solid A credit rating and is now preparing for the bond insurance solicitation process. Upon Council approval of the recommended action and conclusion of the 30-day appeal period, bond certificate pricing and issuance will commence. It is anticipated that bond closing would occur during the latter part of December. In an adjoining action the Public Works Agency is requesting the addition of two Assistant Engineer II positions and one Construction Inspector II position. The positions will provide much needed assistance in the design and inspection of the $100 million dollar Neighborhood Street initiative. 80A-2 Street Rehabilitation Financing December 3, 2007 Page 3 FISCAL IMPACT Approval of the resolutions and related agreements authorizes staff to prepare certain financing documents relating to local street improvements totaling $60 million dollars. A total cap including issuance costs is not to exceed $70 million and 6% per annum. Ja~e~s ~ Executive Director Public Works Agency ~V"'" ~ APPROVED AS TO FUNDS AND ACCOUNTS: ~~~~~ \A~:~' Francisco Gutierrez Executive Director Finance & Management Services Agency 80A-3 JWF 11/19/2007 RESOLUTION NO. 2007- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AUTHORIZING THE EXECUTION AND DELIVERY OF A CERTIFICATE PURCHASE AGREEMENT AND AUTHORIZING THE DISTRIBUTION ON AN OFFICIAL STATEMENT IN CONNECTION WITH THE OFFERING AND SALE OF SUCH CERTIFICATES, AND OTHER MATTERS RELATING THERETO, AND RATIFYING ACTION PREVIOUSLY TAKEN OR APPROVED TO BE TAKEN, INCLUDING THE EXECUTION AND DELIVERY OF AN INSTALLMENT SALE AGREEMENT AND THE EXECUTION AND DELIVERY OF CITY OF SANTA ANA, CALIFORNIA, GAS TAX REVENUE CERTIFICATES OF PARTICIPATION (2007 LOCAL STREET IMPROVEMENT PROJECT) PURSUANT TO A TRUST AGREEMENT. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1. The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. The Santa Ana Financing Authority (the "Authority") is empowered to assist the City of Santa Ana (the "City") in financing certain public capital improvements pursuant to Article 4 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California and pursuant to that certain Joint Exercise of Powers Agreement by and between the City of Santa Ana and the Community Redevelopment Agency of the City of Santa Ana, dated August 1, 1993; B. The City has previously determined, pursuant to Resolution No. 2007-062, adopted by the City Council of the City on August 20,2007 (the "Initial City Resolution"), to enter into a 2007 Installment Sale Agreement with the Authority, (the "Installment Sale Agreement") in order to apply certain motor vehicle fuel tax revenues received by the City to acquire certain public capital improvements consisting of street resurfacing and related improvements (as more fully described in the Installment Sale Agreement) for the benefit of the City in accordance with Article XIX, Section 1 of the California Constitution (collectively, the "Street Improvement Project"); C. In order to provide for the delivery of the City of Santa Ana, California, Gas Tax Revenue Certificates of Participation (2007 Local Street Improvement Project) (the "Certificates") and to establish and declare the terms and Resolution No. 2007 -XXX Page 1 of 4 80A-4 conditions upon which the Certificates are to be executed and delivered and secured, the Authority, pursuant to Resolution No. SAFA-2007-002, has previously determined to enter into a Trust Agreement with The Bank of New York Trust Company, N.A. (the "Trust Agreement"); D. E.J. De La Rosa & Co., Inc., as underwriter (the "Underwriter"), has submitted to the City and the Authority a proposed form of an agreement to purchase the Certificates in the form of a Certificate Purchase Agreement (the "Certificate Purchase Agreement"); E. A form of the Preliminary Official Statement (the "Preliminary Official Statement") to be distributed in connection with the public offering of the Certificates has been prepared; and F. All acts, conditions and things required by the laws of the State of California and the City Charter of the City to exist, to have happened and to have been performed precedent to and in connection with the consummation of such financing authorized hereby do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the City is now duly authorized and empowered, pursuant to each and every requirement of law, to consummate such financing for the purpose, in the manner and upon the terms herein provided; Section 2. The form of Certificate Purchase Agreement, on file with the Clerk of the Council, is hereby approved, and the City Manager, the City Attorney, the Clerk of the Council, the City Treasurer and the Executive Director of Finance and Management Services of the City (the "Authorized Officers") are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Certificate Purchase Agreement in substantially said form, with such changes therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the aggregate amount of the Certificates shall not exceed $70,000,000, the final maturity date of the Certificates shall be no later than January 1, 2040, the true interest cost applicable to the Certificates shall not exceed 6.00% per annum and the underwriter's discount for the sale of the Certificates shall not exceed 1.0% of the aggregate principal amount of such Certificates. Section 3. The execution and delivery of the Certificates, on the terms and conditions set forth in, and subject to the limitations specified in, the Trust Agreement, is hereby authorized and approved. The Certificates shall be dated, shall bear interest at the rates, shall mature on the dates, shall be subject to call and redemption, shall be issued in the form and shall be as otherwise provided in the Trust Agreement, as the same shall be completed as provided in this Resolution. Section 4. The form of Preliminary Official Statement, on file with the Clerk of the Council, with such changes, insertions and omissions therein as may be approved Resolution No. 2007-XXX Page 2 of 4 80A-5 by an Authorized Officer, is hereby approved, and the use of the Preliminary Official Statement in connection with the offering and sale of the Certificates is hereby authorized and approved. The Authorized Officers are each hereby authorized to certify on behalf of the City that the Preliminary Official Statement is deemed final as of its date, within the meaning of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 (except for the omission of certain final pricing, rating and related information as permitted by such Rule). Section 5. The preparation and delivery of an Official Statement, and its use in connection with the offering and sale of the Certificates, is hereby authorized and approved. The Official Statement shall be in substantially the form of the Preliminary Official Statement with such changes, insertions and omissions as may be approved by an Authorized Officer, such approval to be conclusively evidenced by the execution and delivery thereof. The Authorized Officers are each hereby authorized and directed, for and in the name of and on behalf of the City, to execute the final Official Statement and any amendment or supplement thereto for and in the name and on behalf of the City. Section 6. The Authorized Officers and other officers, employees and agents of the City are hereby authorized and directed, jointly and severally, to do any and all things which they may deem necessary or advisable in order to consummate the transactions herein authorized and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution. Section 7. All of the findings, terms and provisions of the Initial City Resolution are hereby ratified, confirmed and approved. Section 8. All actions heretofore taken by the various officers, employees and agents of the City with respect to the transactions set forth above are hereby approved, confirmed and ratified. Section 9. This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. ADOPTED this 3rd day of December, 2007. Miguel A. Pulido Mayor APPROVED AS TO FORM: By: Joseph W. Fletcher, City Attorney Resolution No. 2007-XXX Page 3 of 4 80A-6 AYES: Council members NOES: Councilmembers ABSTAIN: Councilmembers NOT PRESENT: Councilmembers CERTIFICATE OF ATTESTATION AND ORIGINALITY I, PATRICIA E. HEALY, Clerk of the Council, do hereby attest to and certify the attached Resolution No. 2007-_ be the original resolution adopted by the City Council of the City of Santa Ana on December 3,2007. Date: Clerk of the Council City of Santa Ana Resolution No. 2007-XXX Page 4 of 4 80A-7 80A-8